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In the latest testament to the surging demand for cloud computing services, fuelled by the surge in AI adoption globally, both Alphabet and Microsoft have just reported record-breaking earnings for the most recent quarter.

Together, the pair account for nearly $5 trillion of the worlds economy, positioning them among the top four most valuable companies today.

Microsoft, the worlds most valuable company, with a market cap of $2.965 trillion, saw revenue soar to $61.9 billion in the last three months, representing a 17% increase compared to the same period last year. Operating income climbed an impressive 23% to $27.6 billion, with net income reaching $21.9 billion, accounting for a 20% increase.

Driving the Redmond-based companys figures was its thriving cloud division, which recorded revenue of $35.1 billion, accounting for 57% of the entire companys revenue and marking an impressive 23% year-on-year growth.

Speaking about the impressive performance, Microsoft CEO Satya Nadella commented: Microsoft Copilot and Copilot stack are orchestrating a new era of AI transformation, driving better business outcomes across every role and industry.

In the same three months, Alphabet reported revenue of $80.5 billion, marking a considerable 15% year-on-year increase. Of that, Google Cloud accounted for around $9.6 billion a notably smaller proportion compared with Microsofts cloud business. The company has a market cap of $1.950 trillion, positioning it as the fourth most valuable company in the world, behind Apple and Nvidia.

Google CEO Sundar Pichai likened the AI revolution to those of the web, mobile, and voice technology. Ruth Porat, President and Chief Investment Officer; CFO, added: Our strong financial results for the first quarter reflect revenue strength across the company and ongoing efforts to durably reengineer our cost base.

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With both companies hitting record-high earnings and continuing on their respective upward trajectories, its clear that cloud services and AI technologies will continue to play a significant role in the worlds economies moving forward.

The figures also quantify growing concern over tech giants dominance of the market, with the likes of the European Commission, the CMA, and others all getting involved by launching their own investigations.

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Cloud and AI demand push Alphabet and Microsoft earnings to new high - TechRadar